In the mid-2000s, an American automaker opened an auto-financing company in China, Shanghai-based C Automotive Finance Company (China) Ltd ("CAF"). CAF grew rapidly and broke even in three years. Nonetheless, the long cycle time of its application process led to rampant dissatisfaction among dealers and also lowered the number of car purchases financed by CAF as a percentage of total cars sold. The auto-financing industry in China held great potential but was also becoming increasingly competitive as more and more foreign companies entered the market. In order stay on top of the game, CAF must improve the efficiency of its financing application process. What actions could CAF undertake to achieve this objective?

Functional Area :

Strategy & General Management

Learning Objective:

This case provides students with a basic understanding of the auto-financing business in China and some of the problems faced by an emerging service industry in a developing economy. The teaching objectives of the case are:1. To explore the problems associated with an emerging service industry in a developing economy. 2. To explore the re-design of a business operation.